Few details but enough to fear

Major companies and industry groups are worried about the large amount of revenue being set aside for households under a carbon price while the detail of how businesses will be compensated has not yet been determined.

The federal government has indicated more than 50 per cent of the revenue from a carbon price will be provided to households.

Under the original carbon pollution reduction scheme, around 46 per cent of the revenue over 10 years was devoted to households, although this was considerably higher with the inclusion of fuel tax offsets.

Business Council of Australia acting chief
Maria Tarrant
said she was concerned there was no detail on how the energy sector and the competitiveness of emissions-intensive trade-exposed industry would be supported under a carbon price. “The BCA supports assistance for low-income and vulnerable households but equally important is finalising the detail that will give households and business confidence that Australia’s economic growth and competitiveness are not damaged," Ms Tarrant said.

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“You almost need to know all of these things before you start allocating some unknown revenue."

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Boral chief executive
Mark Selway
–who sits on the government’s climate change business roundtable – said it was ridiculous for the government to be talking about “compensating and overcompensating on a permanent basis before they’ve worked the numbers out".

“Those things need to be far more understood before decisions are taken," he said. “The net of all this is Australia has shown time and time again that it is not capable of managing complex tax issues. This is being done on the run with no understanding at all of the implications of competitiveness and offshore implications."

Brickworks chief executive
Lindsay Partridge
said the “social engineering agenda" would make the tax uncompetitive and ineffective compared with countries with better-designed systems.

“The tax will need to be twice as high as necessary to achieve the same result due to the leakage caused by the wealth transfer," he said. “The tax should be income neutral for the government using the tax received from those wishing to increase emissions being used at the same rate for those companies reducing emissions."

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Qantas
spokesman said the application of the scheme and transitional arrangements for industry should be as equitable as possible so individual sectors were not disadvantaged.

This should be supplemented by measures to support and encourage investment in low-carbon technology, he said.

“We have no objections to compensation for households in principle," he said. “However, it is difficult to comment on the implications for business while the level of the carbon price and the exact transitional arrangements for industry are still being determined."

Australia Aluminium Council executive Miles Prosser said industry was worried about how the carbon tax would evolve, particularly as the system moved toward an emissions trading model.